After almost 3 years of struggling with the bottlenecks and the reduced revenue caused by the COVID-19 pandemic, many businesses were left in a far from desirable state.
Even now, after the pandemic has subsided, a great number of these businesses still have trouble keeping operations running, and a large majority of them are facing bankruptcy.
In 2020 alone, small businesses disappeared from the market, with the total number falling by nearly 29%, and this trend carried into the following years, with 2023 being somewhat favorable for small business owners.
That being said, you should always be prepared for what’s to come, and having a plan for when things go south is what separates good entrepreneurs from bad ones.
Keep reading to learn more about what you can do to keep your business afloat and push through any form of adversity.
Keep your finances in check
Knowing where every single dollar of yours is going is the first step to staying on top of your finances.
In order to know just how capable your business is of remaining open, you’ll first want to get a good idea of what you’re working with, and what better way to do it than being diligent in your financial reports?
Even if it may seem negligible, a single dollar can make a huge difference, and remember that these small costs tend to pile up, meaning that if you ignore them for extended periods of time, you may end up creating debt.
Another thing to keep in mind is your business’s capabilities in terms of meeting financial obligations like utility payments, rent, and material costs, and you should also make sure that you don’t have any personal debts assumed by your business.
Budget
Creating a budgeting plan can sound tough when you’re working with limited resources, but oftentimes it’s the one thing that can get you out of a tight spot.
While it may seem like no cuts are possible at the time, certain sacrifices can and should be made for the sake of your business, and if it means reducing rent space or letting some people go for the time being, you shouldn’t run from it.
Don’t let your emotions get the best of you, and even if it may look tough at first, you’ll soon realize that every decision you’ve made was in the best interest of your company.
At the end of the day, keeping your business afloat is all that matters, and once you get back on your feet, you can re-hire any of the employees that were affected by the downsizing.
Think of it as temporary changes for the sake of the company rather than letting go of someone for good.
Find a flexible supplier
Sometimes, you may be able to get a better deal on some materials if you just negotiate with your supplier, and if you present your current situation to them, they might just agree to it.
This doesn’t have to be a permanent agreement, and you could just decide to make some deferred payments until your business is back up and running at full speed.
A payment plan like this can help you keep things running smoothly without having to sacrifice your financial stability in order to maintain the efficacy of your manufacturing process.
Other times, however, you may be required to change suppliers in order to meet your goals, and if you do, don’t shut the door on your way out, as you can always return to your previous supplier when you’ve got sufficient funds for their product.
Prioritize debt
This may sound a bit counterintuitive considering the main goal of staying in business is to eventually expand and grow into a larger company.
However, you can’t expect to grow with significant debt holding you back, and you should be working around the clock to clear all your debt before making any advances in terms of expanding operations.
Debt is one of the many things that can completely collapse a business, and you should always be working towards getting rid of it as fast as possible.
Of course, there’s a difference between good debt and bad debt, and if your business is able to incur a decent amount of good debt and pay it back on time, you may increase your chances of getting approved for a small business loan or a grant in the future.
Bottom line
Staying afloat as a small business owner in this economy is tough work, and you’ll often find yourself wondering if you should even continue trying to make your dream into a reality.
However, if you’ve got the dedication, any business can be repaired, even after nearly 3 full years of reduced revenue.
Keep trying and incorporate some of the strategies presented in this article to see your business prosper in the near future.